Revolving Funds for Sustainability Projects at Airports (2019)

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A I R P O R T C O O P E R A T I V E R E S E A R C H P R O G R A M ACRP RESEARCH REPORT 205 2019 Research sponsored by the Federal Aviation Administration Subscriber Categories Aviation • Environment • Finance Revolving Funds for Sustainability Projects at Airports Adam Klauber Craig Schiller Joey Cathcart Rocky Mountain institute Boulder, CO Philip Quebe Mia Stephens Brad Jones cadMus Waltham, MA Mark Orlowski Aaron Karp sustainable endowMents institute Boston, MA Ken Cushine FRasca & associates, llc New York, NY

AIRPORT COOPERATIVE RESEARCH PROGRAM Airports are vital national resources. They serve a key role in trans- portation of people and goods and in regional, national, and interna- tional commerce. They are where the nation’s aviation system connects with other modes of transportation and where federal responsibility for managing and regulating air traffic operations intersects with the role of state and local governments that own and operate most airports. Research is necessary to solve common operating problems, to adapt appropriate new technologies from other industries, and to introduce innovations into the airport industry. The Airport Cooperative Research Program (ACRP) serves as one of the principal means by which the airport industry can develop innovative near-term solutions to meet demands placed on it. The need for ACRP was identified in TRB Special Report 272: Airport Research Needs: Cooperative Solutions in 2003, based on a study spon- sored by the Federal Aviation Administration (FAA). ACRP carries out applied research on problems that are shared by airport operating agen- cies and not being adequately addressed by existing federal research programs. ACRP is modeled after the successful National Cooperative Highway Research Program (NCHRP) and Transit Cooperative Research Program (TCRP). ACRP undertakes research and other technical activi- ties in various airport subject areas, including design, construction, legal, maintenance, operations, safety, policy, planning, human resources, and administration. ACRP provides a forum where airport operators can cooperatively address common operational problems. ACRP was authorized in December 2003 as part of the Vision 100— Century of Aviation Reauthorization Act. The primary participants in the ACRP are (1) an independent governing board, the ACRP Oversight Committee (AOC), appointed by the Secretary of the U.S. Department of Transportation with representation from airport operating agencies, other stakeholders, and relevant industry organizations such as the Airports Council International-North America (ACI-NA), the American Associa- tion of Airport Executives (AAAE), the National Association of State Aviation Officials (NASAO), Airlines for America (A4A), and the Airport Consultants Council (ACC) as vital links to the airport community; (2) TRB as program manager and secretariat for the governing board; and (3) the FAA as program sponsor. In October 2005, the FAA executed a contract with the National Academy of Sciences formally initiating the program. ACRP benefits from the cooperation and participation of airport professionals, air carriers, shippers, state and local government officials, equipment and service suppliers, other airport users, and research organi- zations. Each of these participants has different interests and responsibili- ties, and each is an integral part of this cooperative research effort. Research problem statements for ACRP are solicited periodically but may be submitted to TRB by anyone at any time. It is the responsibility of the AOC to formulate the research program by identifying the highest priority projects and defining funding levels and expected products. Once selected, each ACRP project is assigned to an expert panel appointed by TRB. Panels include experienced practitioners and research specialists; heavy emphasis is placed on including airport professionals, the intended users of the research products. The panels prepare project statements (requests for proposals), select contractors, and provide technical guidance and counsel throughout the life of the project. The process for developing research problem statements and selecting research agencies has been used by TRB in managing coop- erative research programs since 1962. As in other TRB activities, ACRP project panels serve voluntarily without compensation. Primary emphasis is placed on disseminating ACRP results to the intended users of the research: airport operating agencies, service pro- viders, and academic institutions. ACRP produces a series of research reports for use by airport operators, local agencies, the FAA, and other interested parties; industry associations may arrange for workshops, training aids, field visits, webinars, and other activities to ensure that results are implemented by airport industry practitioners. ACRP RESEARCH REPORT 205 Project 02-77 ISSN 2572-3731 (Print) ISSN 2572-374X (Online) ISBN 978-0-309-48063-5 Library of Congress Control Number 2019947007 © 2019 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FRA, FTA, Office of the Assistant Secretary for Research and Technology, PHMSA, or TDC endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. Cover figure credit: Rocky Mountain Institute NOTICE The research report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the National Academies of Sciences, Engineering, and Medicine. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; or the program sponsors. The Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; and the sponsors of the Airport Cooperative Research Program do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of the report. Published research reports of the AIRPORT COOPERATIVE RESEARCH PROGRAM are available from Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet by going to http://www.national-academies.org and then searching for TRB Printed in the United States of America

The National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, non- governmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Marcia McNutt is president. The National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. John L. Anderson is president. The National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president. The three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. The National Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine. Learn more about the National Academies of Sciences, Engineering, and Medicine at www.national-academies.org. The Transportation Research Board is one of seven major programs of the National Academies of Sciences, Engineering, and Medicine. The mission of the Transportation Research Board is to increase the benefits that transportation contributes to society by providing leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisciplinary, and multimodal. The Board’s varied committees, task forces, and panels annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. Learn more about the Transportation Research Board at www.TRB.org.

C O O P E R A T I V E R E S E A R C H P R O G R A M S AUTHOR ACKNOWLEDGMENTS The research reported herein was performed under ACRP Project 02-77 by Rocky Mountain Institute and its subcontractors Cadmus, Sustainable Endowments Institute (SEI), and Frasca & Associates, LLC. Adam Klauber was the Principal Investigator. The other authors of this report are Craig Schiller, deputy-principal investigator, and Joey Cathcart of Rocky Mountain Institute; Philip Quebe, Mia Stephens, and Brad Jones of Cadmus; Mark Orlowski and Aaron Karp of SEI; and Ken Cushine of Frasca & Associates, LLC. The authors would also like to thank the following individuals who provided invaluable testing and feed- back throughout the toolkit development process (listed alphabetically): Borgan Anderson (SEA), Kane Carpenter (AUS), Michael Cheyne (ATL), Erin Cooke (SFO), Peter D’Alema (Virginia Resources Authority), Benjamin Gould (SFO), Kevin Gurchak (PIT), Sara Kaplan (DTW), Jeremy King (Denison University), Luis Maggiori (Lane Community College), Stephanie Meyn (SEA), Liza Milagro (ATL), Scott Morrissey (DEN), Alelia Parenteau (City of Santa Barbara), Cynthia Parker (PHX), Tanya Starr (PDX), Michael Swain (Virginia Department of Aviation), Caroleen Verly (Harvard University), and Jacqui Yeck (PIT). Additional parties provided essential support for this research. The Association for the Advancement of Sustainability in Higher Education (AASHE) was a co-publisher of the GRF Implementation Guide and has approved the authors of ACRP Research Report 205 to use content sources from AASHE’s publication. SEI was the primary author of the same publication. The three higher education-based case examples, found within Appendix C, were drawn from existing publications and updated by the research team. CRP STAFF FOR ACRP RESEARCH REPORT 205 Christopher J. Hedges, Director, Cooperative Research Programs Lori L. Sundstrom, Deputy Director, Cooperative Research Programs Marci A. Greenberger, Manager, Airport Cooperative Research Program Theresia H. Schatz, Senior Program Officer Megan A. Chamberlain, Senior Program Assistant Eileen P. Delaney, Director of Publications Natalie Barnes, Associate Director of Publications Kami Cabral, Editor ACRP PROJECT 02-77 PANEL Field of Environment Ryan A. Spicer, PepsiCo, Plano, TX (Chair) Amitabha Bandyopadhyay, State University of New York, Farmingdale, NY Rhona K. DiCamillo, DKMG Consulting, LLC, Ponte Vedra, FL Valerie Ann Holt, Metropolitan Washington Airports Authority, Washington, DC (retired) William David Shoard, Accredited Energy Consulting Services, Teaneck, NJ Melissa Solberg, Tampa International Airport (TPA), Tampa, FL Leslie “Bree” Taylor, Sacramento International Airport, Sacramento, CA Janell Barrilleaux, FAA Liaison Kevin Partowazam, FAA Liaison Liying Gu, Airports Council International–North America Liaison Christine Gerencher, TRB Liaison

ACRP Research Report 205 provides guidance for determining if establishing a dedicated revolving fund for sustainability projects is the right funding approach for your airport. The report also provides instructions on how to implement and best utilize this solution. Green revolving funds (GRFs) offer an alternative approach for investing in projects that gen- erate operational savings and will provide a way to advance an airport’s sustainability goals. While there are several potential sources for funding airport sustainability projects [capi- tal budget, utility rebates and subsidies, and competitive grants such as FAA’s Voluntary Airport Low Emissions Program (VALE)], these sources each have challenges in terms of use and availability. An innovative approach to address these challenges is to establish and make use of a revolving fund for sustainability projects tailored to airports. By adopting this approach, airports will gain the ability to track savings or revenues from other capital proj- ects and apply those benefits to new sustainability projects. An airport could then leverage those financial benefits into flexible, self-financing opportunities for future sustainability projects. Research under ACRP Project 02-77 included several nonairport-related case examples that have managed GRFs for over a decade and two airport-related case examples. Poten- tial funding sources and options to establish the initial seed funding for GRFs are also provided. Additional resources consist of process flow diagrams that identify the critical decision-making steps necessary to develop and optimize the GRF; descriptions of effective performance-tracking mechanisms; and educational resources and engagement strategies to achieve consensus among internal and external stakeholders. The research team was led by staff from Rocky Mountain Institute in association with staff from Cadmus, Sustainable Endowments Institute, and Frasca & Associates, LLC. F O R E W O R D By Theresia H. Schatz Staff Officer Transportation Research Board

1 Summary 4 Chapter 1 GRF 101—High-Level Overview 4 1.1 What Is a GRF? 4 1.2 Benefits of Utilizing a GRF 5 1.3 Advantages of a GRF in an Airport Context 5 1.4 Leveraging Savings into Opportunity 6 1.5 Working with Airlines 7 Chapter 2 Where Are GRFs Already Working? 7 2.1 GRF Case Example Summary 9 Chapter 3 Phase 1: Planning—Initiating an Airport GRF 10 3.1 Step 1: Perform Research—Understand Your Airport 19 3.2 Step 2: Select a GRF Model 26 3.3 Step 3: Assess Investment Potential 27 3.4 Step 4: Engage Stakeholders and Build Buy-In 31 Chapter 4 Phase 2: Implementation—GRF Activation Steps 31 4.1 Step 5: Secure Seed Capital 41 4.2 Step 6: Establish Fund Governance and Procedures 42 4.3 Step 7: Launch the Fund 44 Chapter 5 Phase 3: Operations—GRF Project Implementation and Ongoing Management 44 5.1 Step 8: Implement Projects 47 5.2 Step 9: Track, Analyze, and Assess Performance 48 5.3 Step 10: Optimize and Improve 50 Chapter 6 Conclusions 51 References and Other Resources 54 Appendix A Frequently Asked Questions for Funding Airport GRFs 66 Appendix B Energy Conservation Measures 79 Appendix C Case Examples 97 Appendix D Measurement and Verification 117 Appendix E Sample Charter 120 Appendix F Glossary C O N T E N T S Note: Photographs, figures, and tables in this report may have been converted from color to grayscale for printing. The electronic version of the report (posted on the web at www.trb.org) retains the color versions.